Reem’s reputation as a pleasant and affordable location has attracted growing legions of tenants. But price rises seem inevitable with the removal of the rent cap, and for many that will determine whether they stay or go.
Abu Dhabi’s Reem Island comes of age – but will tenants be priced out?
Stephen Roche has lived on Reem Island for two years and he doesn’t want to leave.
“I’ve got Reem-itis,” says the restaurateur from Australia. “I think everyone that lives here gets a bit Reem-centric. Now that there are more things happening on the island you find yourself not leaving.”
Mr Roche is putting his money where his mouth is. Six weeks ago his company opened its first brasserie, Leopold’s of London, in Sun & Sky Tower in the Shams area of Reem. Now he is planning a second restaurant in the same building, a Thai eatery called Smoking Doll.
“When I moved here I was really just attracted by the building, which has very good facilities, and by the fact that our chairman already had these locations,” says Mr Roche, sipping coffee in his bustling cafe on a Thursday mid-morning. “But now Reem is really coming into its own.”
But it hasn’t always been like this. Since construction work started in 2005, Reem Island has suffered its share of growing pains. A master plan, put together by the island’s then three master developers: Sorouh Real Estate, Tamouh Investments and Reem Investments, envisaged that the 6.5 million square metre natural island 600 metres off the coast of Abu Dhabi would one day be home to 200,000 people, have seven schools, four hospitals, 10 mosques and two police stations. But with infrastructure work only just completing as the global financial crisis hit, only a handful of developments have been completed and much of the island remains a vast construction site of stalled half-built towers and empty plots of sand.
That is set to change as shops open, people move in and the island starts to benefit from its proximity to key future employers such as the Cleveland Clinic Abu Dhabi and the new financial district of Al Maryah Island.
On the terrace outsise Leopold’s of London cafe parents chat while supervising their children on the nearby playground while businessmen hold meetings inside and smart-looking young men and women tap away on laptops.
In the distance the dark masses of Abu Dhabi’s new Sowwah Square financial district and the criss-cross tower of the Cleveland Clinic Abu Dhabi hospital are a reminder that Reem Island offers the closest large-scale housing schemes to an increasing number of new jobs in the capital.
Reem Island was the most searched for property location in Abu Dhabi last year, according to the propertyfinder.ae portal. It accounted for almost one in five property views in the capital.
At the same time asking rents also rose the highest of all those in the city, jumping by an average of 20.8 per cent.
On January 14, Arabtec announced that it had been awarded the contract to build a 61-storey block of flats and 15-floor hotel building as the second phase of the landmark Gate Towers scheme on Reem as construction work on the island starts to pick up. And property agents in the city report that more developers are preparing to restart work at stalled schemes on the island
Manaz Noordheen, a marketing manager, is one of the many hopeful tenants drawn to the area. “I’ve been in Abu Dhabi for three months and am living with my cousin in Muroor Road but I’m hoping to move to a studio in Gate Towers next door,” he says. “I would really like to live on Reem.”
Sitting with their young children, the housewives Ellen and Jamie, both from the US, talk frankly about their reasons for moving to Reem’s nearby Sea View Tower – value for money.
“We’ve been living on Reem Island for five months. We chose it because my husband’s colleagues said it was one of the more affordable places in Abu Dhabi,” says Ellen whose family moved to Abu Dhabi from Mumbai.
“As a family we need to find a place where we can afford to live comfortably on just one income.”
Both women are concerned about the announcement last November that rent rises would no longer be capped at 5 per cent per year.
“We moved here because Saadiyat got too expensive for us and it was a bit out of the way. Here it feels like you’re not right in the city but you’re close.”
“It’s good because once you cross the bridge say goodbye to all that Abu Dhabi chaos,” adds Jamie, whose family has been living on Reem for nine months.
“Reem definitely offers value for money at the moment but if rents go up then we’ll have to leave,” she adds.
Over at the newly opened Geant supermarket in Marina Square on the other side of the island, the bustling cafes of Sun & Sky Tower feel a long way away.
Most of the shops in the mall here remain empty and only a handful of cars sit in the mall’s large car park.
“I moved here because it’s company accommodation so the company pays my rent,” says Mark, an Irish expatriate who has been living in nearby Ocean Terrace since he moved to Abu Dhabi from Dubai last May.
“If I didn’t have a company flat here I don’t know if I would choose to live here. At weekends I go to Dubai, or to Jones the Grocer in Abu Dhabi if I want to stay local. I don’t really stay on Reem. The best thing about living here is that it only takes six minutes for me to drive off Reem to Abu Dhabi Mall.”
One of the most striking aspects of this emerging district of Abu Dhabi is the sheer number of new apartment blocks rising out of the sand – Mangrove Place, Wifaq Tower, Al Maya Tower, Oceanscape and City of Lights, to name but a few.
As recently as a year ago, many of the cranes on the island stood motionless over projects that had been put on hold. But now building sites across the island are hummingwith activity.
“We are definitely seeing more interest in plots of land on Reem Island,” says William Neill, the head of Cluttons’ Abu Dhabi office.
“Over the past few months we have been asked to conduct a number of new development appraisals and property valuations on the island as developers start to look at resuming work on residential and commercial schemes and we expect this trend to continue throughout 2014 and into 2015 as house prices and rents increase,” he added.
Back in Leopold’s, Mr Roche is looking on at the new building with approval, even if Reem Island’s new-found popularity may eventually mean higher rents.
“Sun and Sky Towers are now getting a little bit more expensive,” he says.”But with all the new residential towers and offices opening, there’s still a range of prices on Reem – so there’s a real mix of people.”